Yang resigns from Yahoo board; shares up

Former CEO also steps down from Alibaba, Yahoo Japan boards

By

BenjaminPimentel

SAN FRANCISCO (MarketWatch) — Yahoo Inc. on Tuesday said Jerry Yang, the company’s co-founder and former chief executive, has resigned from its board of directors.

Shares of Yahoo
YHOO
rose more than 3% in after-hours trading, as the company announced Yang, considered a pioneer of the Web revolution in the 1990s, has also stepped down as a board member at Yahoo Japan Corp. and Alibaba Group.

“My time at Yahoo, from its founding to the present, has encompassed some of the most exciting and rewarding experiences of my life,” Yang said in a statement. “However, the time has come for me to pursue other interests outside of Yahoo.”

Yahoo Chairman Roy Bostock praised Yang as a “visionary and a pioneer.” Yang, with co-founder David Filo created one of the dot-com era’s pioneering companies. Yahoo is now known as one of the world’s most popular Web portals.

But the company has struggled with the rise of Internet rivals led by Google Inc.
GOOG, +0.42%
More recently, Yahoo has reeled from a period of uncertainty, highlighted by the sudden firing of former CEO Carol Bartz.

The company recently hired Scott Thompson as its new CEO.

“Jerry leaves behind a legacy of innovation and customer focus for this iconic brand, having shaped our culture by fostering a spirit of innovation that began 17 years ago and continues to grow even stronger today,” Thompson said of Yang.

Yang was known to be a well-liked and respected executive at the company he co-founded. But he also became controversial recently.

Yang remains a major Yahoo shareholder. He is currently the company’s seventh largest shareholder with 46.6 million shares worth about $721.5 million, according to data from FactSet Research.

His co-founder Filo is Yahoo’s second largest shareholder with 72.5 million shares worth $1.1 billion.

On Yang, Roger Kay of Endpoint Technologies Associates said: “A guy who realized that it’s time to leave the party. ... It’s better for him and it’s better for the shareholders.”

As Yahoo’s shares rose in after hours, one analyst advised that it was better to sit it out, even though he expected some investors were seeing Yang’s departure as a sign that the potential sale of its valuable Asian assets is more likely.

Last year, Yahoo was criticized and accused of mishandling a dispute with Alibaba over the transfer ownership of Alipay, the Chinese company’s online payments business, to an entity controlled by Alibaba CEO Jack Ma. Yang was on the Alibaba board at the time.

Yahoo has a roughly 40% stake in Alibaba. The two companies settled the dispute in a deal that analysts argued turned Yahoo into a forced seller of the Alipay electronic payments business.

“We expect shares of Yahoo to be up on this news, but the same persistent questions around a potential deal involving Yahoo’s Asian investments will continue to drive the stock,” said Ben Schachter, a Macquarie Securities analyst, in a note late Tuesday.

He added that those questions are about the valuation of those assets and tax treatment. “There is clearly value in Yahoo’s Asian investment portfolio, but until we can get more clarity on these questions, we prefer to sit this one out.”

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